Books – Great by Choice and How Mighty Fall

These two books reflect on the same concept – instability of our fast-changing business environment. Surprisingly, the data challenges our traditional views of bold visionaries taking risks… and succeeding.

Great by Choice

Interesting: it is the discipline rather than innovation that allow companies to succeed in turbulent environment.  The authors point out that the innovation is necessary, but it is necessary up to a certain industry-specific level. As soon as the level is reached, more innovation would not help, and can even hurt if the discipline is scarified.

Evariant has a very interesting interview with one of the authors:

“20 miles march” – a steady progress with limitation on the bottom and on the top of the task to achieve. This approach allow the company to produce steady growth, rather than unsustainable expansions during good years and decline during bad years. Successful companies methodically progressed in most of the years comparing to unstable companies.

“Bullets first, and then cannon balls” – a strategy of inexpensive low-risk and low-impact “trials” in new opportunities before committing more resources to invest into empirically proven areas.

“Productive paranoia” – realization of possibility (and probability) of unknown adverse events and preparedness for them (cash reserves, etc.).

Do successful companies have to “act fast”?  Not necessarily. It is better to take time to investigate and evaluate the situation if delay will not significantly increase the risk. 

Consistent recipe of success – successful companies have a rather stable “recipe” of success and change it less than less successful companies, but do change it to some degree.  Successful companies in general more disciplined and consistent than unsuccessful companies.

Interesting perspective on luck (good and bad) and its role in company’s success: unless it it a catastrophic bad luck, company’s discipline helps to capitalize on the good luck and overcome the bad luck. However, the role of luck can not be denied.

How Mighty Fall

How Mighty fall is the book that preceded Great by Choice; the most surprising for me was the innovation component.  The company that is about to fall could “out-innovate” the market. After reading Great by Choice it is clear why – just certain level of innovation is needed; after this level is met, extraordinary innovation might hurt rather than help the company.

Stages of the fall:

Stage 1: Hubris Born of Success
Stage 2: Undisciplined Pursuit of More
Stage 3: Denial of Risk and Peril
Stage 4: Grasping for Salvation
Stage 5: Capitulation to Irrelevance or Death

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Books: Simple Concepts that are Difficult to Implement

Another two great books that can be wonderful examples of rather simple, and very powerful concepts, that seem to be difficult to implement. I guess, I would love to read a book on why it is so difficult 🙂  However, there is something very human that compels us to jump into action without a boring little thing  such as a reasonable strategy or going through a simple checklist.  However, it looks like these un-glamorous approaches could save lives and fortunes.

Positioning: The Battle for Your Mind – a wonderful marketing classic violated by so many organizations to their own peril, and The Checklist Manifesto: How to Get Things Right is an extensive research concluding that simple discipline system applied at any complex process dramatically increases the success of this process.

Positioning: recommend not to go “head 0n” into competition with the market leader because “our product is better,” but find a “hole” in the mind of the target audience and “position” it as unique.  For example, the resort X is rated as good as the well-known resort Y, but much closer to home.  Ha!  Why is it so easy for organizations to jump to “our product X is just like product Y, only better, when organization’s leaders can not explain what is the difference?  🙂

Checklist Manifesto: as complexity increases and the specialists’ expertise became more and more narrow, a simple check list can help pilots handle more complex airplane, a team of medical professionals to keep patients alive, and a financial genius to identify better future investments.

I guess, the most interesting point is our world and our human nature.  While our world is becoming increasingly complex, we seem to resits using simple disciplined tools to be more successful in our tasks….

Books: Cloud and IBM

It was interesting to listen to (thanks, Audible.com!) to these two books close in time.  Almost the same industry, the same technical developments, completely different companies, and so similar struggles.

Behind the Cloud: The Untold Story of How Salesforce.com Went from Idea to Billion-Dollar Company-and Revolutionized an Industry – the book about the birth, survival, and success of the SalesForse.com and Who Says Elephants Can’t Dance? Inside IBM’s Historic Turnaround – a story about historic turnaround of a giant IBM.

Rather amazing was the same premise of the companies: SalesForse.com was founded on the idea of creating a CRM based on the needs of the users, and one of the first changes Gerstner made at his arrival to IBM was concentration on the customer needs.

Both companies were also changing and adjusting their pricing strategy based on changing environment. As IBM had to lower the price of its flagship product to keep competitive, SalesForse had to change its monthly pricing structure – its signature trait – to assure financial stability.

Probably the most interesting similarity is companies’ approach to competitive environment, its positions on the market, and taking advantage of changing technology.  White IMB took a position of an ultimate “integrator,” sometimes recommending competitor products as part of the best “solution” for the customer, SalesForse.com opened opportunity for other organizations to integrate and create extensions for the software.  Very successful moves.

Behind the Cloud is an excellent source of ideas for any company in the SaaS market, and Who Says Elephants Can’t Dance? is a treasure of examples of transformation of established structures into a more customer-centric organization.

Great books – highly recommend!